health care and coverage - Demos

health care and coverage

THE STATE OF

YOUNG AMERICA

Cost of Living | STATE OF YOUNG AMERICA 1

H ea l th C a r e a n d co v e r a g e

D isappearing jobs and diminishing wages have affected not just
the wealth, but also the health, of young Americans. These
trends, combined with rising health care costs, make young
adults the most uninsured age group in the country. Major
changes to the health insurance system, however, have improved coverage
rates among young Americans, with more progress expected in the years
ahead.

Findings at a glance Young adults are generally healthier than their
older adult counterparts. But that fact has fueled
Young Adults Need Health Insurance misguided media characterizations of this age
••Medical Conditions Do Affect Young Adults cohort as “invincible.” Young adults do need
••Costs Often Exceed Avail able Assets care. In addition to the cost of preventive care,
routine doctors visits, and occasional health
Trends Behind the High Uninsurance Rates hiccups, a significant subset of young adults deal
••Employer-Sponsored Coverage Has Fallen, And with costly chronic conditions. Young adults are
Public And Private Coverage Has Not Filled The Gap also more likely to engage in riskier activities like
athletics, meaning that they face sudden high-
An Unhealthy Recession, But a cost health incidents at a relatively high rate.
Positive Outlook for Coverage

••The Great Recession Drove Uninsurance Rates
For Young People To Record Highs
••The Future Looks Healthier For Young Adults

But their light pocketbooks make paying for any significant medical services while uninsured close to
impossible. The high cost of medical expenses is no secret to anyone who has ever required care, but when
primarily low-income young adults face high out-of-pocket costs due to uninsurance or high-deductible plans,
the results can be particularly difficult to handle.

At the same time, young adults lack health insurance more often than any other age group. Changes in the
labor market over the past few decades have left many with limited access to traditional forms of coverage.
Jobs that once offered benefits are no longer doing so, and the percent of young adults working part-time
has increased dramatically over the past few decades.1 Rising health care costs mean today’s young adults can
rarely afford insurance once they leave the nest, or age out of child-centered government services as individual
insurance is currently unaffordable for a typical low-wage earning young adult.

Indeed, for too many young adults, uninsurance and the resulting bad health outcomes are not a choice, but
an economic reality. And the threat of uninsurance can impede personal economic growth in other ways:
when young people are tied down to geographic locations, jobs or economic choices based on available
coverage options, the freedom to pursue their version of the American Dream is stifled.

2 STATE OF YOUNG AMERICA | Health care

But in spite of a bleak historical trend of “My husband is considered
rising uninsurance rates among young an hourly employee, he
adults, propelled in recent years by the Great works full-time but he
Recession, changes to the insurance system doesn’t get any benefits. I’m
brought by health care reform have begun currently employed full-
to reverse that trend and increase access time and our insurance for
to insurance. Young adults will see greater our family of four is almost
security in their coverage options as they $800 a month. I mean it’s
navigate a changing labor market. killing us.”

- Bloomington, Indiana

Young Adults Need Health Insurance

M e d i c a l c o n d i t i o n s d o a ff e c t y o u n g a d u lt s

Preventive care, chronic illnesses, and catastrophic events are all health issues that young people face.

• About 15 percent of young adults live with a chronic health condition such as asthma or
diabetes. Another 9 percent grapple with depression or anxiety disorders.2

• Almost 16 percent of young adults aged 18 to 24 have a “pre-existing condition.”3

• Young adults ages 19 to 29 find themselves in the emergency room more than any other age
group under the age of 75.4

Costs often exceed available assets

Young adults can ill-afford high out-of-pocket costs. For many, health care costs have the serious potential of
wiping out often meager savings, forcing many young adults to turn to credit cards to pay their medical bills.

• In 2008, the median medical expenditure for uninsured figure 3.1 | H e a lt h E x p e n d i t u r e s a n d M e d i c a l
18 to 24 year-olds was $286, with a mean of $1,649. Credit Card Debt of Young Adults, 2008
The median for 25 to 34 year-olds was $417, with a
mean of $2,121 (Figure 3.1).5 AVERAGE HEALTH EXPENDITURES
AVERAGE CREDIT CARD DEBT DUE
TO MEDICAL EXPENSES, AGES 18 34

• Credit card debt is 79 percent higher for young adults $1,649 $1,484
with medical debt than those without—a much higher
difference than for any other age.6 $2,121

18 24 YEAR OLDS 25 34 YEAR OLDS

Source: Average Credit Card Debt from Dēmos, “Sick and In the Red,” 2010,
Median Health Expenditure from YI analysis of MEPS datapublished numbers for
1989-2007

Health care | STATE OF YOUNG AMERICA 3

Trends Behind the High Uninsurance Rates

Em p l o y e r-s p o n s o r e d c o v e r a g e h a s fa l l e n, a n d p u b l i c a n d p r i vat e c o v e r a g e

has not filled the gap

Fewer have jobs, fewer of those jobs have benefits than they once did, individual insurance is unaffordable
for many often low-wage-earning young adults, and public insurance cannot currently substitute for lack of
private coverage.

• The proportion of full-time figure 3.2 | T Y PE O F HEALTH COVERAGE F OR Y o u n g A d u l t s , 1 9 9 9 A n d 2 0 0 9
workers aged 18 to 24 with
insurance through their job NO HEALTH INSURANCE
dropped by 12.8 percent in the PUBLIC INSURANCE
past 10 years alone, while the EMPLOYER SPONSORED INSURANCE
proportion of workers aged 25 INDIVIDUALLY PURCHASED PRIVATE INSURANCE
to 34 with coverage through OTHER COVERAGE
their employer dropped by 8.5
percent, both far higher than 5% 3% 18 24 YEAR OLDS 5.%
the drop in employer sponsored
coverage for all workers (4.4 6% 30%
percent).7 27%

• Overall, just 43.7 percent of 53% 44%
all 18 to 24 year-olds and 55.7 13%
percent of 25 to 34 year-olds 2009 15%
were covered by an employer- 1999
sponsored plan in 2009, both
significantly lower than a decade 25 34 YEAR OLDS
earlier (Figure 3.2). 5% 6%

28%
21%

9%
68% 56% 11%

• In 2009, the average annual 1999 2009

individual premium for a single Source: Dēmos Analysis of Current Population Survey Annual Social and Economic Supplement

young adult was $1,429 for an

18 year-old and $2,104 for a 30 year-old.8 Those prices assume an enrollee does not have a pre-

existing condition, and do not include the significant out-of-pocket costs common with typically

high-deductible individual plans.

• These high costs are why just 5.5 percent of both 18 to 24 and 25 to 34 year-olds had
individually-purchased private insurance in 2009 (Figure 3.2).

• Public health insurance coverage of young adults has increased over the past decade. 15.3 percent
of all 18 to 24 year-olds in 2009 were covered by public insurance of some kind (Figure 3.2).

4 STATE OF YOUNG AMERICA | Health care



isbah’s story

A G E 2 1 | A usti n , T X

When Isbah was 18 years old, she started to have symptoms of fatigue, making it hard to
concentrate or complete her schoolwork. In the same year her father transferred jobs and her
family had to find private insurance coverage. But the new insurance company denied her
coverage based on her history of fatigue. She was left with no options, so she limited visits to
the doctor and hoped that her health wouldn’t get worse. She went uninsured.

A year later, she began losing weight uncontrollably and other symptoms appeared. Soon after, she was
diagnosed with Lupus, a chronic auto-immune disease that can result in hair loss, joint pain, loss of appetite,
and much worse if left untreated. Her father transferred jobs but the new insurance again denied her coverage
because of her pre-existing conditions. She bought generic drugs instead of prescribed brand-name drugs, and
limited doctors visits.

Like many young people, Isbah simply could not afford her medical care without coverage. But like many
young adults, health coverage was difficult to come by. As a student now at the University of Texas, she turns
increasingly to her parents for financial support as she struggles to continue her studies, and to deal with the
emotional stress of a chronic disease and the monetary stress of the high cost of care. Things have begun to
look up for Isbah though. Her father’s insurance finally covered her and she will stay on that plan due to the

new dependent coverage extension until she turns 26. •

The future looks healthier for young adults

The Affordable Care Act has begun to reduce uninsurance rates and will likely help many young people get
coverage in the next few years as its provisions take effect.

• The share of uninsured 18 to 24 year-olds dropped by 2 percentage points in 2010, largely due
to the Affordable Care Act’s provision allowing them to join their parent’s plan. Overall, 500,000
more 18 to 24 year-olds were insured in 2010 than in the year before.10

• However, this increase in coverage for 18 to 24 year-olds simply made up for the lost coverage
from the Great Recession; the uninsurance rate for these young adults is still far higher than
it was 20 years ago. And the uninsurance rate for 25 to 34 year-olds, most of whom were not
helped by the new provision, stayed the same between 2009 and 2010.

• The number of uninsured young adults 18 to 24 continued to fall—by a total of one million in
the last quarter of 2010 and the first two quarters of 2011.11

• Almost 8 million currently uninsured young adults will be eligible for Medicaid in 2014.12

• Over 9 million currently uninsured young adults will be eligible for subsidies to help them
purchase insurance starting in 2014.13

6 STATE OF YOUNG AMERICA | Health care

ENDNOTES

1. Dēmos analysis of Bureau of Labor Statistics data.
2. Sara R. Collins, Elise Gould, Bisundev Mahato, Jennifer L. Nicholson, Sheila D. Rustgi, and Cathy Schoen, “Rite of Passage? Why Young Adults Become Uninsured

and How New Policies Can Help, 2009 Update,” The Commonwealth Fund, vol. 64 (August 2009). http://www.commonwealthfund.org/~/media/Files/Publications/
Issue%20Brief/2009/Aug/1310_Nicholson_rite_of_passage_2009.pdf.
3. Kim Bailey, Christine Sebastian, and Kathleen Stoll, “Health Reform: Help for Americans with Preexisting Conditions,” Families USA, (2010) p. 3. http://www.
familiesusa.org/assets/pdfs/health-reform/pre-existing-conditions.pdf.
4. Sally H. Adams, Claire D. Brindis, Charles E. Irwin, Tina Paul Mulye, M. Jane Park, “The Health Status of Young Adults in the United States,” Journal of Adolescent
Health , No. 39 (2006). http://smhp.psych.ucla.edu/pdfdocs/healthstatus.pdf .
5. YI analysis of the Medical Expenditure Panel Survey.
6. Mark Rukavina and Cindy Zeldin, “Borrowing to Stay Healthy: How Credit Card Debt is Related to Medical Expenses,” Dēmos and the Access Project (2007). http://
www.aecf.org/upload/publicationfiles/fes3622h1313.pdf.
7. Dēmos Analysis of Current Population Survey Annual Social and Economic Supplement.
8. America’s Health Insurance Plans, Center for Policy and Research “Individual Health Insurance, 2006-2007, A Comprehensive Survey of Premiums, Availability, and
Benefits,” (December 2007). http://www.ahipresearch.org/pdfs/Individual_Market_Survey_December_2007.pdf.
9. Dēmos analysis of the Current Population Survey Annual Social and Economic Supplement.
10. U.S. Census, ‘Income, Poverty, and Health Insurance in the United States: 2010,” Table 8 (2011).
11. U.S. Office of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Issue Brief, “One Million Young Adults Gain Health
Insurance in 2011 Because of the Affordable Care Act,” (September 21, 2011). http://aspe.hhs.gov/health/reports/2011/DependentCoverage/ib.pdf.
12. Young Invincibles analysis of the Current Population Survey Annual Social and Economic Supplement. Those at 133% and below of federal poverty level will qualify
for Medicaid in 2014, regardless of whether they have children or not. The numbers were calculated using the current income levels of the uninsured population.
13. Young Invincibles analysis of the Current Population Survey Annual Social and Economic Supplement. Those with incomes between 134 and 400% will qualify for
various levels of subsidies to purchase insurance. The numbers were calculating using the current incomes levels of the uninsured population.

Health care | STATE OF YOUNG AMERICA 7

8 STATE OF YOUNG AMERICA